So I've been trying to call my Dad to try the Facetime feature on our iPhones & we couldn't get it to work. I noticed when I called him, I had a "Facetime" button on my phone menu and thought you just push that to use it. We were both in WiFi range, but no luck.
Turns out there is one little setting you need to turn on.
If you are on a new iPhone 4s running iOS5 or newer, its super easy Go to-->Settings, then hit the dedicated Facetime Button
If you are on an older iPhone 4 running iOS4- Its under "Settings" --> "Phone" --> Facetime --> "On"
There is a FaceTime Button you have to turn "on"
Once we both did that, we were able to connect right there during the phone call. I must say...it was pretty cool to be able to see my Dad on Maui and chat with him through my iPhone. It works in both Horizontal and Vertical modes too! Looking forward to the day that I will be able to do this over my phone service instead of just WiFi.
Bonus Tip: How to take Screen Shots with your iPhone : Ever wonder how to take a screen shot of whatever was on your iPhone? No Problemo: Simply tap your home button and on/off button at the same time. If you do it right, you will get a white "flash" and a screen shot is sent to "photos. :)